We initiate coverage on DNeX with a highly convicted BUY recommendation and
TP of RM1.35/share based on sum-of-parts (SOP) valuation. We peg its
technology segment to a CY23F P/E of 25x, which is at a slight discount to its
global peers weighted average forward P/E of 26x. While we understand that
SilTerra is a relatively small player in this space and has a relatively promising
technology vs. its listed global peers, we believe that valuation is justified as we
are expecting SilTerra to grow faster than peers, with a growth of 28% (vs. a
weighted average of 23% for its global peers). At about 14x FY23F earnings in its
entirety, we believe that DNeX is a compelling case given its strong foothold in
both the semiconductor and energy spaces.